U.S. President Donald Trump announced on the 2nd (local time) that he would impose mutual tariffs of up to 50% on 57 major trading partners, causing turmoil in the global gaming industry. Gaming devices have been hit hard by the mutual tariffs, while gaming products are not subject to tariffs, resulting in mixed reactions. However, there are predictions that if consumption declines due to rising device prices and a global market downturn from the tariff effects, the entire gaming industry will be adversely affected.
◇ Console market 'direct hit'… Gaming devices like PCs and smartphones also affected
According to the gaming industry on the 9th, Nintendo announced that it would postpone the pre-sale of the next-generation game console 'Nintendo Switch 2' originally scheduled for the U.S. on that day (local time). A Nintendo official noted, "We will not start Nintendo Switch 2 pre-sale in the U.S. on April 9 to assess the potential impact of tariffs and changes in market conditions," adding, "The pre-sale date will be announced later." However, there is no change to the release date (June 5).
Nintendo's decision follows the announcement of mutual tariffs by the Trump administration. The U.S. constitutes one-third of Nintendo's sales. Earlier, Nintendo relocated the manufacturing plants for the Nintendo Switch 2 from China to Vietnam and Cambodia to reduce production costs. However, the Trump administration imposed tariffs of 46% and 49% on products from Vietnam and Cambodia respectively, disrupting those plans.
The North American selling price for the Nintendo Switch 2 is $449.9 (73,980 won). Considering that the official retail price for the previous model in North America was $299.9 (44,380 won), the price increase for the new model raised significant concerns locally. Analysts suggest that if tariffs cause another price increase, consumer sentiment may decline, negatively affecting device sales.
Sony, which accounts for about half of the global console market, is also in a precarious situation. This is because the production sites for Sony's console devices, such as PlayStation, were included in the new tariff targets. In fact, most of the assembly production for the PlayStation (PS) 5 takes place in China and Vietnam. Notably, while a 34% tariff was initially applied to China, the U.S. decided to impose a 104% tariff in response to China's retaliatory tariffs.
Currently, the global PC industry obtains parts produced in various countries, including display panels (from Korea, China, Taiwan), memory and SSDs (from Korea, Taiwan, China), and processors (from Taiwan, Vietnam, Malaysia), and assembles them in one location, with most parts produced in Asia. The supply chains of major smartphone corporations like Samsung and Apple are also primarily based in Asia, including China, Taiwan, India, and Vietnam.
◇ Game products are exempt from tariffs 'exemption'… Decrease in consumption leads to industry downturn
Game products were a key industry not mentioned during the Trump administration's announcement of mutual tariffs. In the case of game products, the intangible nature of software services made it difficult to impose tariffs effectively.
In South Korea, the export proportion of the gaming industry, centered around game products, is significant. According to the Ministry of Culture, Sports and Tourism, in 2023, out of the total content industry exports amounting to $13.339 billion (19.6 trillion won), the gaming industry's share reached 62.9%, or $8.394 billion (12.34 trillion won).
However, the impact of tariffs is likely to negatively affect the gaming industry. If the product prices of gaming devices rise due to tariffs, more consumers may postpone purchases, leading to a decrease in game product sales. The global consumer market's downturn is also a negative factor. Since games are not essential goods, it is one of the sectors that could be significantly impacted by an economic recession.
Changes are expected in domestic game companies' export strategies. Nexon launched 'First Berserker: Kazan' globally on the 28th, focusing on the North American and European markets with optimization for console controllers, but encountered the hurdle of tariff issues. Similarly, Krafton's 'inZOI,' released on the same day, is a digital game based on the PC platform, which is not directly affected by tariffs, but there might be delays in console launch timing as they consider expanding to console platforms.
Professor Kim Jeong-tae from Dongyang University said, "If President Trump imposes more retaliatory tariffs and issues arise in the global economy as a whole, the gaming industry will inevitably be affected, even if it is not directly subject to tariffs."